Credit Score vs. Delinquent Items

[Anonymous]

I've been working with the good folks here to help attack my credit score and start raising it as quickly as possible. I recently came across an article at Money Talk News (found here) that states paying off old debt won't do a thing to raise your score. I found that interesting, since I'll be paying all my bills on secured cards over the next year or so and was wondering how this will affect them.

I have several old credit card debts raging anywhere between $200-$300 each, plus one large judgment for a lease around the $6,000-$7,000 mark. I'm going to work to get these cleaned up in the future, but in the mean time I need to know if they are going to anchor my score down?

Will I see an increase in my credit score when paying on these secured cards over the next year while these delinquent items are still on my report? I want to make sure I'm not just spinning my wheels and failing to make upward progress.

Thanks!

[ORllyNao]

Are the credit cards you're planning to pay down still active, or are they old charge-off or bad debt accounts? 

[Anonymous]

That's a good article. I am glad to  see a range of score impact based on the negative item.

I especially found this part interesting:

If that agency or lender doesn’t respond, the CRA can’t determine the item is accurate, so they have to remove it. They are then required to notify the other CRAs so it gets removed with them as well.

That's a joke. If an item is removed from TU for example, has anyone ever experienced the item being removed from the other CRA's because TU told them to? I've never heard of that happening and it certainly has not happened to me.  I wish it was that easy.  Interesting that it's "supppsed" to work that way.  I wonder if we can dispute items from any one reprort simply based on the fact that they've been removed from the other CRA??

[Caldric]

Nope I have never had a CRA contact the others. For instance I had Tax Lien removed from Experian and TU but Equifax refused. Took me 2 years of hit and miss trying to get it off and the only reason I did get it off was a complaint to the CFPB once I did the online complaint was removed in less than 48 hours. Crazy but no never had them contact each other that I know of.

[Anonymous]

They do contact one another for fraud alerts.

[RobertEG]

The FCRA does not require a CRA to notify other CRAs of the result of their disputes.

The burden is placed on the furnisher of the disputed information (i.e., the creditor or debt collector) when handling a dispute referred to them by  one CRA to notify any other CRAs to which they have also reported the disputed information if the furnisher agrees that the reporting requiires update or deletion.

It is not sufficient to simply correct with the CRA that referred the dispute to them.

That applies only when the furnisher has clearly agreed that their reporting is inaccurate, and thus in need of correction.

[Anonymous]

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@Anonymous wrote:

I've been working with the good folks here to help attack my credit score and start raising it as quickly as possible. I recently came across an article at Money Talk News (found here) that states paying off old debt won't do a thing to raise your score. I found that interesting, since I'll be paying all my bills on secured cards over the next year or so and was wondering how this will affect them.

I have several old credit card debts raging anywhere between $200-$300 each, plus one large judgment for a lease around the $6,000-$7,000 mark. I'm going to work to get these cleaned up in the future, but in the mean time I need to know if they are going to anchor my score down?

Will I see an increase in my credit score when paying on these secured cards over the next year while these delinquent items are still on my report? I want to make sure I'm not just spinning my wheels and failing to make upward progress.

Thanks!

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Such blanket statements are almost always incorrect. There are many factors that are involved and a given debt may or may not improve scores by paying it off.

[Anonymous]

I can tell you from my own experience.   I had several chargeoffs from 2010-2011 when I went through a rough patch and couldn't handle all of what i owed.   Was finally able last year to start attacking all these old obligations. 

Anyway, my score was in the 620 range when I started, and after paying off all but one of those chargeoffs and a deficiency balance on a repoed car (I had 7 accounts total).  My scores have climbed to (EQ 690, TU 677,  EX  693).  

Now I do have two mortgages over 10 yeas old  and several old accounts that are reporting always paid as agreed that surely helps my scores.  

But definately know that paying those old balances off in my case helped my scores because they were being updated every month and also were included in my total utilization.   It was always around 80-90 percent, now it stays around 6-7%.

[Anonymous]

Thanks to all above for the insight and attempt to address my question. I suppose I should clarify something and be a little more direct in my question. These delinquent accounts I'm referring to are from the early to mid 2,000s (I have not had any dealings with credit since then). I am unable to pay these off any time soon, but perhaps a few years from now I'll be able to. Just not within my means at the moment.

So  what I need to know specifically is, if I ignore everything on my report and just pay towards new lines of credits on time every month for the next few months/years, will I see my credit score rise or not?

Thanks

[Anonymous]

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@Anonymous wrote:

Thanks to all above for the insight and attempt to address my question. I suppose I should clarify something and be a little more direct in my question. These delinquent accounts I'm referring to are from the early to mid 2,000s (I have not had any dealings with credit since then). I am unable to pay these off any time soon, but perhaps a few years from now I'll be able to. Just not within my means at the moment.

So  what I need to know specifically is, if I ignore everything on my report and just pay towards new lines of credits on time every month for the next few months/years, will I see my credit score rise or not?

Thanks

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For the most part, yes. Recovering is more about re-establishing new credit and keeping current than it is about "cleaning up" old debts. As I mentioned in another thread, my reports are a hot mess, with collections (paid and unpaid), 4 judgements (all paid), late payments (all over two years old now), and a BK (one more year to go), but in the last year I have pushed my scores up about 100-140 points, and obtained 15K in revolving credit and just put an offer in on a house.